The Free Press, Mankato, MN

February 1, 2014

South central municipal liquor stores make profits, sustain losses

Booze funds parks, playgrounds, pools

By Dan Linehan

---- — City-owned liquor stores continue to be a boon or a burden, and little has seemed to change among the 16 such entities in the nine-county region.

In St. James, profits continue to subsidize the theater and the pool. The store made a profit of $170,256 this year, up 8.7 percent, which also helped it update the city’s website and broadcast council meetings online, City Administrator Joe McCabe said.

The city’s residents know the good that the store’s profits provide, and by the same token its employees know the social ills of alcohol. According to a 2002 study for the Department of Justice, the 7 percent of Americans who are frequent drinkers consume 45 percent of the country’s alcohol.

“There are times they've refused to serve people who have a problem,” McCabe said.

Mapleton continues to deal with deficits, this year of $10,434. That loss, though, has been more than halved since 2011.

Because its store had losses in two of the past three years, Mapleton was required by state law to hold a public hearing about the future of its liquor store. That meeting was held last year, and the city decided to continue.

“I’m sure we’re in the black for 2013,” Mapleton City Administrator Patty Woodruff said. Like more than half of the cities that own liquor stores, Mapleton's venue also includes a bar, which has added more food options.

“It seems to be pretty popular,” she said.

The state auditor recently released the annual report on city-owned liquor stores.

Wells ($-44,948) and Waldorf ($-35,670) were the other two area city-owned liquor stores to lose money.

Though its store made a small profit, about $12,000, Cleveland also transferred $130,000 into its liquor store fund, by far the largest such transfer in the state. The Free Press was unable to reach the city for an explanation.

If there is a lesson for cities in the data, it’s not a new one: Liquor stores are more profitable than bars.

The eight liquor stores in south-central Minnesota had an average store profit of $89,404, and none of them lost money.

But among the eight locations that also include bars, the average profit was a measly $73, and three of them lost money.

That trend held true statewide, too: The average profit for liquor stores was about $201,000, but only about $31,000 when a bar was in the mix.

In Blue Earth, the liquor store made $96,929 in profits and was able to transfer 92 percent of them for other uses.

Part of that money went to buy playground equipment at Putnam Park and the ballfields on Fourteenth Street, City Administrator Kathy Bailey said.

Ballplayers’ young siblings can have trouble sitting through a full game, and the equipment gives them a place to stay, she said. She credits the store’s good relationship with residents for its profits.

“It helps the city, but they also know they’re going to get friendly small-town service,” she said.

Bailey also said to expect less for the 2013 numbers because of the disruption caused by the Highway 169 project.

Statewide, the combined profit of the 239 city-owned liquor stores totaled $27.3 million in 2012, an increase of 16.6 percent. Twenty-five cities reported losses, compared with 36 in 2011.